Foreign exchange holdings by the central bank continued to account for the largest share of foreign exchange held in the banking system, albeit slightly falling due to payment of government foreign obligations.

Meanwhile, the foreign assets position of banks improved significantly to Tsh2.4 trillion from Tsh1.6 trillion following building up of deposits. The bank said that net credit to the government and private sector increased by 9.5 per cent in the year ending November 2018.

The outturn was higher than the growth rate of 6.4 percent in the year to October 2018 and a contraction of 4.6 per cent in the year ending November 2017 Much of the increase of domestic credit emanated from private sector credit, which grew at an annual rate of 5.0 per cent in November 2018 compared with 4.8 per cent and 1.9 per cent in October 2018 and November 2017, respectively.

This was partly an outcome of accommodative monetary policy and improving the assets quality of banks. Trade and manufacturing sectors and personnel-related activities mostly for small and medium financing remained the major beneficiaries of credit extended by banks to the private sector.

Banks loans to personal-related undertakings loans to households and salaried employees grew by 63.6 percent in the year to November 2018, consistent with an increase in demand by households and salaried employees to finance small and medium-sized business activities.

The latest Monthly Economic Report (MER) by the Bank of Tanzania (BoT) shows that despite the slow growth of money supply, the level of money in the economy was adequate due to increase in digital payments in transactions.

This was driven by growth in transferable deposits negotiable certificates of deposit. Broad Money Supply (M3) is a measure of the money in circulation, which includes physical currency and demand deposits.